Trading of shares associated with the troubled property giant China Evergrande Group were suspended in Hong Kong at the start of Monday trading.
Shares of the group's property management unit - Evergrande Property Services Group - were also halted. However, those belonging to the China Evergrande New Energy Vehicle Group Ltf. have not been suspended.
Although no official reason has yet been given for the move, the development comes shortly after the debt-laden group failed to make a pivotal bond interest payment last week.
The Evergrande group has for weeks raised concerns among financial insiders who see the company's setbacks as a possible sign that its defaults could spread across Asian markets and, more broadly, to global markets.
In an effort to limit any effect to markets, Chinese authorities earlier met with banks to ease credit from homebuyers, with the government eventually opting to buy out the group's stake in a struggling lender, according to Bloomberg.
At present, the group is carrying a $300 billion-plus debt default, after having seen its shares plummet by some 80% during 2021. Over the course of the last few weeks, Evergrande has undergone credit downgrades, investor protests, missed interest payments and fruitless fundraising pushes.
In one of its efforts to settle scores, the Evergrande group in late September detailed that it would be selling roughly $1.5 billion of its non-publicly traded Shengjing Bank shares.
The financial threat has left the Chinese government stuck between a rock and a hard place, considering that Evergrande's collapse will leave thousands of retail investors with heavy losses and hundreds of thousands of people without homes.
An unidentified government adviser perviously relayed to the Financial Times that the latest developments surrounding Evergrande are "only the tip of the iceberg."
"If something really dramatic happens to Evergrande, the risk premium for other developers’ debt will be much higher, creating another drag for the sector," the adviser said, referring to China's development sector and economy.
The company has less than a month to cover late payments and escape default.